Mayor's View: Common sense in attracting business

Recently, the Stephenson County Board narrowly approved expansion of the Freeport-Stephenson County Enterprise Zone.

By Jim Gitz

Journal Standard

By Jim Gitz

Posted Jul. 20, 2013 at 12:01 AM
Updated Jul 20, 2013 at 7:20 PM

By Jim Gitz

Posted Jul. 20, 2013 at 12:01 AM
Updated Jul 20, 2013 at 7:20 PM

Recently, the Stephenson County Board narrowly approved expansion of the Freeport-Stephenson County Enterprise Zone.

For the unaware, an enterprise zone is a state authorized area that has certain tax incentives for business development. There are only a select number of zones in the entire state. Once created, the enterprise zone is generally administered by local authorities acting under state authority.

The recent expansion is for Sunflower Enterprises, a company that intends to build a ship repair facility on the Mississippi River in East Dubuque. East Dubuque sought access to our enterprise zone so it could compete for this expansion. Both the city of Freeport and Stephenson County had to sign off on the expansion. The expansion would bring $8 million of private capital investment and a $3 million annual payroll to our region. There is and will be no downside to either the city or the county. In fact, some of our residents might be employed there.

The city passed the zone expansion quickly and unanimously. Yet, the measure narrowly escaped the County Board by one vote, 10-9. To me, this is a warning sign to the entire region. It suggests that the county cannot be counted on to support job development and economic expansion — even when there is no cost to the county.

We may have varying opinions about economic development tools like enterprise zones, TIF Districts and federal grants.

That’s fine. But, we should not kid ourselves. If we fail to use the very tools provided by the state and national government to foster economic expansion, we will drown in our own backward thinking.

Without the enterprise zone expansion, Sunflower Enterprises will expand; it just won’t be in our region.

Likewise, we can turn our back on grants, but some other city will be more than happy to take the same grant and use it to rebuild their community.

Let’s just talk about what the enterprise zone benefits mean to this business expansion in East Dubuque. The primary benefit is a temporary property tax abatement on improvements. The property owner continues to pay taxes on the existing value of the property. So the taxing bodies lose none of that revenue. And after five years, the owner begins paying property taxes on the new improvements as well.

That’s revenue the region would likely never have realized without the original abatement. Add that to the $3 million in annual payroll and the recirculation of that payroll throughout northwest Illinois, and it’s difficult to argue against the wisdom of extending the enterprise zone benefits.

We talk a lot about the need for jobs in Freeport. We scream about high taxes. The way out of the wilderness is to be “open for business.” We need to be receptive to businesses that want to expand here. We need to look forward, not backward. We need to put the horse-and-buggy days behind us. Now is the time for common sense.

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For the past 60 years, our region has largely turned its back on economic opportunities (think four-lane U.S. 20), and it has cost us dearly. This week, the issue was an expansion in East Dubuque, but tomorrow it may be an expansion we need right here in Stephenson County. Some argue that using enterprise zones, TIFs and grants is a corporate subsidy. Candidly, I am inclined to agree. But they are a fact of life in an economy where businesses can — and do — move anywhere. We have to create a level playing field. If other communities use these tools, we have little recourse but to use them as well.

Prosperity is not an accident. Neither is success. It is time to push through the negativity and make our community better, stronger and more prosperous. That starts with encouraging business expansion, not doing everything to kill it.

Decisions have consequences. Frequently, those consequences are long-term. You never know what local small businesses may turn into major powerhouses employing hundreds of people. If memory serves me right, Microsoft started in a garage.